Future of Franchising

A new perspective on franchising – free book download & invitation to contribute

For the last two years, FPG has been publishing articles detailing what we saw as a significant franchise opportunity supply and demand disequilibrium, which could create a disruption in many franchisors’ businesses. By many accounts and measures, this is now occurring.

Currently there are approximately 3,800 franchisors trying to recruit from a pool of 13,000-15,000 new franchisees (2017 FRANdata and FPG estimates).

Additionally, in any given year 250-350 new franchisors enter franchising without significantly adding new franchise buyers to the marketplace (FRANdata).

Currently, only 3-4% (estimated 13,000-15,000) of the projected 400,000 annual new business startups in the United States are new franchisees. (U.S. Census Bureau) Why don’t more of the 400,000 people starting new businesses choose franchising?

The data suggests franchising carries a high perceived value for the franchisor (which is why so many brands seek to franchise), but a low perceived value for franchisees, which is why so few new entrepreneurs invest in franchises relative to their other ever expanding self-employment options such as independent contractor status and side hustle businesses.  

What should the franchising community do about it?

The predictable impact based on standard economic theory of this supply and demand disequilibrium would be an exodus of Early Stage, Emerging, and other franchisors ill-prepared to weather the changes in the marketplace. Additionally, when supply exceeds demand, one of two outcomes generally occurs to stimulate greater demand:

  1. Price decreases, and/or
  2. The supply side adds more real and perceived value

The best marketplace solution is for franchisors to add more value to franchisees, thereby attracting more of the pool of 400,000 new business start ups.

Reimagining franchising

Joe Mathews, CEO of Franchise Performance Group, announces the launch of Future of Franchising, Forward-Thinking Strategies to Build a National Brand. This book is an attempt to provide critical thinking and feedback for the franchise industry with the goal of creating a new blueprint for successful franchising and a higher value franchise offering.

Mathews saw that thought leaders in franchising never accomplished for franchisors what skilled franchisors accomplished for franchisees — provide a detailed blueprint to build a long-term profitable and sustainable franchisor capable of supporting a strong brand. 

Future of Franchising DownloadFPG invites you to help write the definitive playbook on franchising

FPG invites all franchising thought leaders to comment on and contribute to this body of work. We are soliciting feedback between now and December 31, 2019. FPG will review and include this feedback in the final version to be re-released in first quarter 2020 and distributed internationally.

As a community of franchise industry leaders, let’s seize this opportunity to combine our collective experience and genius. Let’s create a blueprint franchisors and franchisees can use to work together to drive customer value, build profitable businesses, and create front-of-mind awareness to the 400,000+ people who start new businesses each year who currently don’t see franchising as their best option.

Download

  1. Submit your details below to receive a download link for a PDF version of Future of Franchising by Joe Mathews.
  2. Join the conversation by posting your comments on FPG’s LinkedIn Group, Franchising Thought Leaders.
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